VAT filing changes in Xero

27.11.2020
Nathan Bowden
VAT, News

The original method of filing VAT returns in Xero is changing soon and we are assisting our clients to be ready for this.

This is in line with the changes announced by HMRC to introduce Making Tax Digital (MTD) to all VAT registered businesses in April 2022

The changes mean you will no longer be able to submit non-MTD VAT returns on Xero to HMRC by entering your government gateway credentials. 

This comes into effect from April 2021 and therefore VAT periods ending in December 2020, January 2021 or February 2021 will be the last ones that can be submitted via this method.

In order to file your return with HMRC you will now need to do so outside of Xero by entering your Xero VAT return figures manually via the HMRC online portal or by using third party conversion software (which we can help you with). 

When completing this process it is also important to publish your return on Xero to ensure you lock down the period in order to enable you to complete your return when it is next due. This will also provide supporting workings for your advisor or in the event of an HMRC investigation.

It is also important to mirror the VAT figures exactly when submitting the VAT return to avoid any under or over claimed VAT.

 It is also important to mirror the VAT figures exactly when submitting the VAT return to avoid any under or over claimed VAT. 

This process is obviously open to error and requires more manual work, so you may wish to consider adopting early for MTD. Using Xero’s MTD compliant VAT returns eliminates these concerns as you can submit to HMRC by the click of a button and gets you ready for the proposed changes in April 2022. If you would like to discuss this, please do get it touch and one of our Xero specialists will be able to help you. 

Once you take the option to register for MTD it is important to note you will unlikely be able to deregister so ensure you are confident with the processes involved.

If you have any questions surrounding MTD or the changes on Xero

Wide-ranging tax planning and compliance services for individuals seeking advice and guidance from our team of experienced and highly qualified professionals.

Friendly and coherent advice and guidance on accounting and tax matters for small business owners including those starting out for the first time.

Established businesses requiring accounting and tax compliance services, forward thinking tax planning advice and the support to help your business succeed.

Our full range of enhanced corporate services aimed at large companies and those requiring audit, assurance, corporate tax advisory and diverse tax planning services.

Glossary

Test

This is a test definition

more